TextNow

TextNow is currently available for free, and if you'd like to do free texting on your iPad or iPod touch, this app certainly deserves consideration. They actually give you a free phone number that others can use to send text messages to your iPad or iPod touch. It also can be used to send picture messages. It does have ads, but you can use in-app purchasing to upgrade to a version without apps ($5.99 per year). Here's a video demo.